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Articles | September 26, 2013

Alerts and Exceptions: Find and Fix Your Problems Early

Tired of Firefighting? Handle problems before they hurt Every day, your manufacturing operations are faced with a continuous stream of changes-good and mostly bad.  Parts are delivered late, machines...

By WorkWiseSoftware

Tired of Firefighting? Handle problems before they hurt

Every day, your manufacturing operations are faced with a continuous stream of changes-good and mostly bad.  Parts are delivered late, machines break down, problems happen that you don’t know about; and the list goes on.

There are two courses a business can take in handling the rapid changes that happen in every day manufacturing. The first is a reactive approach, the one most commonly followed today.  These businesses are constantly in firefight mode, extinguishing one fire after another, with dire consequences to their customers, employees and their business success.  Their results suffer from poor delivery reliability, poor customer satisfaction, compromised quality, and diminished margins.

The second approach is a proactive one. In this mode, fires are either prevented in the first place, or, alternatively, quickly extinguished before any significant effect.  One of the most beneficial practices in today’s business world is the ability to take a proactive rather than reactive stance to daily challenges.  This article will discuss some of the techniques and methods to keep your business in the proactive mode.

What does it take to be proactive?

There are basically two paths to becoming proactive.

Path 1 – Early Warning

The easiest way to handle new challenges is to be alerted to those challenges before they even occur.  How does one do this?  The main method is to build a system of planned activities and then to monitor against those plans.

For example, if you plan for a four week purchasing lead time on a purchased part, and the vendor now indicates a five week delivery, you can quickly determine how this will impact your production schedule.  You can project whether your delivery promises can be met.  If not, you can then determine alternative courses of action and correct the problem before it happens.  With thousands of different parts, and thousands of various operations, this planning process can become laborious at the best, or impossible at the worst, without an automated system.

Fortunately, ERP systems automate these fundamental planning activities, and continually monitor their progress to alert people of problems.  These plans are characteristically contained in the master schedules, in the MRP schedules, in the demand management schedules, in the quality standards and in the performance management KPI’s.  These real time management systems provide immediate feedback whenever the targets are missed.   Identifying problems immediately affords the best option of correcting those problems before they impact customer delivery, quality, or delivery reliability.

ERP systems also have the ability to plan alternative courses of action.  When management pre-identifies alternative sources of parts, or alternative routing of operations, the ERP system can quickly calculate the potential of these new avenues and indicate whether they will work.  You have a clear picture as to which course is optimal.  Manual systems, or standalone systems without integration of the needed information, cannot provide these warnings or project new courses of action.

Path 2 – First Alert

There will be times when changes occur that just can’t be identified in advance.  Examples include machine breakdowns, absenteeism, and others.  The secret to minimizing these changes is to identify them with the very first occurrence of the problem.  Time is always of the essence and the quicker you identify the problem and notify the right parties, the faster you can eliminate the consequences.  Quick action can greatly minimize the long tail of scrap or rework.
An identification system must not only find the problem, but must be able to provide immediate notifications of those exceptions to the right parties. Delays in response can only lengthen correction time and allow further production of unacceptable items.
ERP systems are also valuable as exception notification systems.  Alerts can be set and delivered in numerous ways.

Other Factors in an Effective Alert and Exception System

Timing by Severity

Another important aspect of an effective notification system is the capability to deliver the right message to the right person on the right channel.  With a comprehensive system, you can set the priorities, the recipient, and the channel to communicate on.  For time sensitive hot issues, it is common to use SMS mobile, dashboards, or screen feedback.  For less sensitive issues, reports, or emails can be used.  The critical factor is that you can set up your system to stay on top of your entire business.

Advances in Technology

Much of the ability to stay proactive has been developed with the latest technologies that have been built into ERP systems.  These include:

Summary

If you are tired of fighting fires, and feel that you are always a bit too late to solving your problems before they hurt your customers, your business and your results; an alert and exception reporting solution could be just the answer you are looking for.  Gaining insights that allow you to correct your course, or to minimize the damage, are one of the easiest ways to put you back in control of your business.

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